Click here to read the original article on ETFdb.com.
Related Posts:- No Related Posts
What’s Driving the Recent High Yield Sell-Off?
August 13, 2014 at 19:00 PM EDT
We have written a few times on The Blog about the ongoing effects of the low Fed Funds rate and quantitative easing. They have pushed interest rates down across markets, propelling investors into asset classes such as corporate bonds and emerging market debt in search of yield. One area where we have seen a lot of inflows is high yield bonds, as this sector has offered yields above 5%. Investors have been less concerned about default risk as global defaults fell below 2% and volatility in both stocks and bonds remained low, making high yield investments all the more appealing. In the past few weeks we have seen some cracks in the high yield picture. Elevated geopolitical risk, an Argentina default and a US jobs report that was weak relative to expectations contributed to the sell-off. The iShares iBoxx $ High Yield Corporate Bond ETF (HYG), which had been trading […] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
We have written a few times on The Blog about the ongoing effects of the low Fed Funds rate and quantitative easing. They have pushed interest rates down across markets, propelling investors into asset classes such as corporate bonds and emerging market debt in search of yield. One area where we have seen a lot of inflows is high yield bonds, as this sector has offered yields above 5%. Investors have been less concerned about default risk as global defaults fell below 2% and volatility in both stocks and bonds remained low, making high yield investments all the more appealing. In the past few weeks we have seen some cracks in the high yield picture. Elevated geopolitical risk, an Argentina default and a US jobs report that was weak relative to expectations contributed to the sell-off. The iShares iBoxx $ High Yield Corporate Bond ETF (HYG), which had been trading […]
